NOV 22, 2019 TECHNICAL INSIGHT. THIS IS NOT AN INVESTMENT ADVICE. EXERCISE DUE DILIGENCE YOUR CAPITAL IS AT RISK.
The VIX is the ticker symbol of the Chicago Board Options Exchange market Volatility Index. It measures the implied volatility of S&P 500 index options.
Others they call it FEAR INDEX or FEAR GAUGE.
We can see and monitor it in trading view using the symbol VIX.
As you can see in the 2nd chart, when S&P 500 (orange) , when the stocks become erratic and very volatile, VIX will be increasing . Notice the drop of prices of stocks can cause the VIX to fluctuate to the highest level.
In reading VIX, for example the index is at 13% , analysts translate it annualized. So 13/12 then can be interpreted as price of stocks can be 1.08% lower or higher as an assumptions.
So if we see an uptrend and seems stable or steady VIX will be registering low level of volatility but if sudden drop or falling markets will cause the VIX to shoot up and interpreted as panic mode.
We can also interpret rising VIX or erratic movements as increased in shortselling order.